Fe/Pd nanoparticles were used to degrade an azo dye, Reactive Black 5 (RB5) in aqueous solution. Fe/Pd nanoparticles were prepared by a simple successive reduction method. Transmission electron microscopy verified the formation of uniform and spherical Fe/Pd nanoparticles with the average particle size of 36.6 nm. Fe/Pd nanoparticles are ferromagnetic (Ms = 111.45 emu/g). This feature facilitates its magnetic separation from the solution. The results showed that 0.5 g/L Fe/Pd nanoparticles can completely decolorize 20 mg/L dye solution at 25 °C. The RB5 removal by Fe/Pd obeys the pseudo-first order kinetic model with rate constant of 1.42 min−1. Our results show that Fe/Pd nanoparticles are more efficient for RB5 removal than pure Fe nanoparticles. The possible decolorization mechanism, obtained by the HPLC–MS technique, scanning tunneling microscopy, and UV–vis spectroscopy, involves three steps of oxidation of iron, dissociation of water, and catalytic hydrogenation of the azo bonds. The synergetic effect of Fe and Pd nanoparticles accelerates the degradation of complex RB5 molecule to smaller non-toxic aromatic compounds.

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